How to set up a company in Vietnam
Private investments have transformed Vietnam
into one of the most powerful economies in Southeast Asia, a factor which is decisive for foreign enterprisers looking for countries with good economic results to start a business in
. One of the places that welcome foreign investments is Vietnam
, a country that can provide certain benefits when starting a business.
Foreign investors who want to set up companies in Vietnam
can choose between several industries which are performing quite well at this moment. Here, we can mention economic sectors such as: the construction sector, the tourism industry, the manufacturing
or the services sector.
Our company formation consultants in Vietnam can offer information on the Investment Law and the Enterprise Act, the most important laws related to starting a business here. Our team of consultants in company formation in Vietnam can help you in all the steps related to starting your own business here, as our specialists have an extensive experience in this field.
Types of structures available for registration in Vietnam
Foreign investors can choose from various company types, depending on their investment strategies and the size of the company they want to establish here. There are also options addressed only to foreign businessmen investing in this country. According to the legislation in Vietnam, the following types of companies are available for incorporation:
- the domestic limited liability company which can be set up by Vietnam residents;
- the foreign-owned limited liability company which can be set up by foreign investors exclusively;
- the free zone company which is available for both local and foreign investors in Vietnam’s free zones;
- the joint venture which is available for foreign investors interested in partnerships with local companies in Vietnam;
- branch and liaison offices which are available for foreign companies seeking to have a presence in Vietnam.
As observed above, foreign investors have plenty of options when starting the process of company formation in Vietnam, when it comes to the legal entity that they can select from. With the help of our company formation specialists in Vietnam, the incorporation of any of the business forms mentioned above can be quite simple.
Investors must also know that there aren’t any minimum capital requirements for setting up a company in Vietnam, which is one of the most important aspects taken into consideration by investors who want to establish companies in Vietnam. Together with the fact that the Enterprise Law provides for the two most popular types of structures for company incorporation, Vietnam is one of the most appealing countries to create a business in.
Speaking about company types, our Vietnam company registration agents remind foreign enterprisers they can open private enterprises, partnerships, limited liability companies, and joint stock corporations. An investor can incorporate a limited liability company in Vietnam as a one-member company or as a multiple-members legal entity.
Particularities when opening a company in Vietnam
Apart from being allowed to set up one of the types of companies acknowledged by the Enterprise Law, foreign investors can also choose one of the special business forms covered by the Investment Act which provides for joint ventures, business cooperation contracts and several types of arrangements with local companies.
Our local company registration specialists can explain the procedure for setting up these types of ventures. In case you would like to set up a company in another Asian country, our team can put you in touch with a reliable team of company incorporation experts in Singapore.
Company registration services in Vietnam
One of the most important services we offer to our clients in Vietnam is related to the incorporation of a business here. If you want to set up a company in Vietnam, we can help with the following services, but we invite you to address to our specialists for information on other company formation services that can be available for you:
- tailored assistance in selecting the right business form in accordance with your needs and industry you want to operate in;
- assistance in preparing all the documents to be submitted with the Vietnam Trade Register;
- virtual office services and nominee shareholder and director services are also available with us;
- assistance in various taxation matters - from tax registration to tax planning and minimization solutions;
- help in obtaining the necessary business permits and licenses for operating in Vietnam.
We invite you to get in touch with our specialists in Vietnam company formation if you have any questions related to starting a business in this country. We can represent you in the process of obtaining business permits and licenses, and you can also address to our team if you need information on the visas that may be required for business purposes.
Requirements for opening a company in Vietnam
The main requirements that investors should respect when opening a company in Vietnam will generally depend on the company type that they have selected for incorporation; various procedures can appear depending on the economic sector in which the company will activate. However, in most of the cases, the procedure for company incorporation in Vietnam will follow the same basic steps.
Most of the times, entrepreneurs from other countries will decide on the foreign-owned limited liability company which allows for operations in various industries. From this point of view, IT, manufacturing, trading and education are open to full foreign ownership. Tourism is one of the industries which require a local partner in Vietnam.
Among the requirements which need to be respected for company registration in Vietnam, we must mention the fact that the company must have a local address in the country. The foreign investor can start with a virtual office address provided by our representatives and he or she can change the address along the way.
If in some cases the shareholding structure of the company is flexible, the resident director requirements imply for any type of company to have at least one resident director. The appointed director of the newly founded company does not have to be a resident in Vietnam at the moment when the company is incorporated, but he or she should have a residential address in this country.
Our local consultants can explain in detail the main requirements to comply with in the first stage of company incorporation in Vietnam and can handle some of the procedures on behalf of investors unable to travel here. Our team can represent foreign businessmen through the power of attorney.
Documents necessary for setting up a company in Vietnam
Local and foreign enterprisers interested in setting up companies in Vietnam must first prepare the statutory documents and then file them with the Trade Registrar. The basic documents which represent the statutory papers of a Vietnamese company are the memorandum and the articles of association.
Through them, the company obtains legal personality, once they are registered with the local institutions. The memorandum and the articles of association have to be drafted and signed in front of a public notary in Vietnam prior to being submitted with the local registration authorities. Following that, the business owner must have a company seal made. Also, when starting a company in Vietnam, investors should also prepare the following papers:
- a list with the name and other details of the shareholders;
- information on the capital participation of each shareholder of the company;
- a feasibility study which must indicate how the business will help the local economy;
- information on how the object of activity of the company will be carried out in accordance with the applicable law in the field;
- an announcement about the registration of the company which must be published three times in a row in a local newspaper.
Steps for company formation in Vietnam
Once the documents that we have presented above are completed, the company’s shareholders have to follow additional procedures on company incorporation in Vietnam. Below, you can find a short presentation on what these procedures are, but you can also rely on our consultants for an extensive presentation on each of the following:
- file the documents prepared with the Companies Register, together with information about the legal address of the company;
- open the corporate bank account which will be used for depositing the share capital;
- register with the tax authorities for VAT and taxation, but also for social security purposes;
- apply for the necessary business licenses or permits before commencing any activity.
Business licenses for foreign investors in Vietnam
The first license to be obtained when opening a company in Vietnam as a foreign investor
is the investment license which is issued by the Department of Planning and Investment
. It takes around one month to obtain such a license, however, where more approvals are needed, the timeframe can prolong.
After the investment license is obtained, the company registration process
can continue, however, the company will need to apply for other special permits and licenses depending on the industry to operate in. Our company formation representatives in Vietnam
can offer more information on the licensing procedures when starting a business as a foreign entrepreneur
Assistance in setting up a company in Vietnam
will need a local representative in order to complete the company registration process in Vietnam
. Our local consultants can help in any of the below mentioned aspects; you can also request the assistance of our team if you need advice on how to obtain the services of a virtual office in Vietnam
- the preparation of all the documents needed to create the new company and their filing with the Business Registration Office;
- the opening of a limited liability company can be completed remotely, so we only need a power of attorney to start the process;
- we can also help with the opening of the bank account and offer virtual office solutions;
- our services also include accounting and bookkeeping for any type of company foreign investors want to open;
- we can also help those who want to buy ready-made companies in order to reduce the time between the registration and the starting of operations of a new company.
Why start a business in Vietnam?
In its region, Southeast Asia, Vietnam represents one of the most developed economies. Both local and foreign businessmen can obtain various incentives that are offered by the local institutions in fields such as agriculture, IT, environmental protection, or science and technology. Apart from these:
- Vietnam provides for a 20% standard corporate tax rate (lower rates are available for the industries mentioned above);
- the country has one of the lowest VAT rates in the world of only 10% (reduced rates of 5% and 0% are also available);
- one can also benefit from preferential taxes, for specific projects started by local companies, which will be charged at a rate of 10%;
- certain investment projects can benefit from tax exemptions which are granted for a period o minimum 2 years to maximum 4 years.
What are the requirements for registering a foreign-owned limited liability company?
Since the limited liability company is a common way to start a business in Vietnam
, we will present below the main aspects that you should consider when opening a foreign-owned limited liability company. If you will choose this company type, you will need to apply for an investment registration certificate, but this will be required as long as there as specific treaties
in force for the business sector in which the company operates. This company type will also require the issuance of a Business Registration Certificate.
Please mind that foreign investors are restricted to open a company in Vietnam
in certain business sectors. The legal framework which establishes the main operations that can’t be developed by foreigners are prescribed by the Law on Investment, Article 6. As a general rule, investors can’t enter the following activities: corporate debt collection, trading
specific goods, such as rare fauna and flora species or endangered flora and fauna, trading minerals or toxic chemicals or carrying a firecracker business.
These are some of the activities which are forbidden to foreign investors. However, according to the law, there are also few economic activities which can be seen as somehow restrictive, as foreign investors must abide by specific rules and have to meet certain criteria in order to gain access to the respective business fields. These categories of business activities is known as conditional business investment; below, you can find few of the activities that will require the accomplishment of certain requirements:
- insurance – providing insurance, reinsurance, brokerage services or auxiliary services related to insurance;
- gaming – organizing a lottery, prize winning games developed as online businesses, casinos;
- accounting – investors will need to receive approval for developing accounting services or auditing;
- customs businesses – special approval is required when operating as duty-free business or as a warehouse or other storage stations;
- businesses related to securities, as well as operating as those related to tax services will need special approval.
You should also know that the foreign owned limited liability company can be set up by a shareholder, and the maximum number of members the company can have is 50. If you want to open a company and need help with the company registration procedure, please feel free to contact our local agents. Our team of consultants in company formation in Vietnam can present the main taxes you have to pay when you set up a company here, and can present the steps you need to follow in order to register for taxes.